GBP/USD in the red near 1.3400, political uncertainty weighs

The GBP/USD pair extends its overnight retreat into the late-Asian, bringing an end to a two-day post-Brexit rebound, as the greenback stages a minor pullback against its major peers.

GBP/USD back below 1.3400

Currently, GBP/USD trades -0.25% lower at 1.3398, having failed to resist above 1.34 handle earlier on the day.  The bears remain in control as we progress towards the early European trades, keeping GBP/USD deep in the red as markets remain cautious ahead of Thursday’s deadline to declare the Conservatives party leadership.

Additionally, broad based US dollar recovery backed by upbeat US GDP and PCE prices index also keeps the cable undermined. The US dollar index rises +0.21% to session highs of 95.90.

Looking ahead, we have an eventful session ahead, with the UK GDP and current account data on the cards, while the US jobless claims and Chicago PMI data will be reported in the NA session. Apart from the data, BOE Governor Carney’s speech and FOMC member Bullard’s comments will be also closely heard.

GBP/USD Levels to consider

The pair has an immediate resistance at 1.3418 (June 28 High), above which 1.3450 (psychological levels) would be tested. On the flip side, support is seen at 1.3370 (5-DMA) below that at 1.3317 (daily S1).